Blue Cross contract impasse with HMA may create opening for other insurers

» Other plans more than happy to step in, says head of Mississippi Association of Health Plans

The market’s invisible hand eventually will decide the outcome of a nearly two-month standoff between Blue Cross & Blue Shield of Mississippi and Health Management Associates over provider reimbursement levels.

In the meantime, executives of Mississippi’s other health care insurers will have their eyes on new opportunities that could accompany any market pullback by Blue Cross & Shield, which HMA says controls 81 percent of the state’s private health care market.’

Most health insurers operating in Mississippi are mum on whether they are ready to fill a void that Blue Cross & Blue Shield of Mississippi would create by continuing to refuse to renew its contracts with Health Management Associates, a Naples., Fla., hospital company that owns 10 Mississippi hospitals, including five in metro Jackson.

However, the head of the Mississippi Association of Health Plans said he expects health care providers such as HMA will soon be more willing to talk business with members of the trade group.

“What I think this is creating,” said association CEO Jeffrey Drozda, is an atmosphere in which “physicians and other groups will be more open to negotiating with other plans.”

Should Blue Cross ultimately sever all ties with Health Management Associates and next year with University of Mississippi Medical Center at expiration of a negotiated one-year contract extension, “other plans would be more than happy to step in,” said Drozda, whose 12-member trade group does not include Blue Cross & Blue Shield of Mississippi.

Association members UnitedHealthCare and Cigna declined to say what they might do should Blue Cross drop two major Mississippi clients.

UnitedHealthCare, however, noted that it is aggressively growing its commercial employer business in Mississippi, having increased its policyholders in that category by 13,000 since last October.

Aetna, which will acquire Northwest Mississippi’s Coventry Health in a soon-to-close deal, says it is exploring opportunities for increasing its market presence in Jackson and on the Mississippi coast.

It won’t happen overnight, said Andrea Meoli, marketing president of Aetna’s Mississippi, Georgia and Alabama markets.

But Aetna intends to give Mississippians more choice through more competition in the marketplace, Meoli said.

Aetna will take a measured approach, she added.

“Our goal is to create partnerships with providers that are long lasting,” she said in a phone interview Tuesday. “The last position we want to put ourselves in is to come into a market and exit quickly because of financial inviability.”

Aetna has national health coverage contracts with HomeDepot and UPS that include Mississippi employees of both entities. While Coventry is limited in its geographic reach for now, completion of the acquisition could position it for growth outside of Northwest Mississippi, Meoli said.

The merged Aetna-Coventry entity, Aetna spokesman Mark Cherniak said, will be “focusing on markets where we can deliver value.”

Meanwhile, Health Management Associates spokeswoman Kace Ragan said HMA will not be surprised if other big insurers such as Aetna, UnitedHealthCare and Cigna move to acquire any business that Blue Cross drops.

Some of the carriers already use HMA hospitals and clinics as network providers, she said. “I would imagine there are a lot of conversations” underway, she added.

Blue Cross & Blue Shield on Monday offered to reinstate three rural hospitals – Memorial Regional Medical Center in Amory; Northwest Regional Medical Center in Clarksdale; and Tri-Lakes Medical Center in Batesville. The hospitals are the only ones in each of the communities.

Amory, Clarksdale and Batesville employers that contract with Blue Cross for company health coverage had faced the prospect of their workers having to travel to hospitals and clinics in other cities.

The week before Blue Cross & Blue Shield made the offer to reinstate the three rural hospitals along with Womens Hospital in Flowood, HMA’s Ragan predicted there would be lots of “fallout” if employers under a Blue Cross plan had to travel long distances for care.

Blue Cross has avoided some of the fallout for now through its concession to the three rural hospitals.

Meanwhile, with open enrollment periods under way, employers whose workers depend on HMA hospitals and clinics for medical care must decide whether to renew with Blue Cross or seek new carriers. Blue Cross insists its policyholders will still have ample options. “Our group customers know we provide a statewide network of options,” the company said in a statement provided by spokeswoman Meredith Virden.

The company said most group plan administrators are focusing this enrollment season on how the Affordable Care Act and its new rating rules and benefit requirements, along with new taxes and fees, will affect their premiums.

“We are working with our group administrators to minimize the impact as much as possible,” the company said.

Many Blue Cross-insured employees in metro Jackson who rely on HMA’s four other area hospitals for care will be forced to find new providers once HMA decides it can no longer afford to charge Blue Cross policyholders at in-network levels.

Among them are the 25,000 employees of the 2,500 area companies that are part of the Greater Jackson Chamber Partnership’s Chamber-Plus Purchasing Alliance.

“Blue Cross will still be our partner,” said Duane O’Neill, Chamber president and CEO.

Whatever headaches the situation creates will only last through 2014. The health insurance part of the Purchasing Alliance will be phased out once the employer mandate goes into effect in 2015, said O’Neill, referring to the federal requirement that companies with 50 or more workers offer coverage to their workers.

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